WhiteWave Foods (WWAV) Stock Up on Third Quarter Earnings Results

Shares of the WhiteWave Food Company (WWAV) were up +1.07 or +2.90 percent to $38.00 per share in premarket trading on Monday, after the company announced it had beaten expectations for third quarter earnings by a penny per share early this morning. WhiteWave Foods stock closed at $36.93 per share, down -0.53 or -1.41 percent in Friday's regular trading session.

Denver, Colorado based WhiteWave Food Company was originally a subsidiary of Dean Foods (DF) that was spun off and had its initial public offering in 2013.

The company specializes in food and beverages, premium dairy products, plant and silk based foods and beverages, as well as organic produce. The company's best known brands are Horizon Organic, Earthbound Farm, Land O'Lakes, Provamel and International Delight. The company is active in North America and Europe and employs 3,800 people. WhiteWave had net income of $2.5billion last year.

WhiteWave Foods reported it had earned $0.27 per share, a +42 percent increase from the 2013's third quarter. Third quarter revenue came to $857 million in the compared to $639 million in the same period one year ago, an increase of +34 percent. Excluding investments associated with a Chinese joint venture, WhiteWave reported third quarter 2014 adjusted diluted earnings of $0.26 per share. Analysts had expected the company to earn $0.26 per share on revenue of $843 million.

Kelly Haecker, Executive Vice President and Chief Financial Officer stated in the company's press release that, "We delivered another quarter of strong top and bottom line results driven by growth across all of our platforms. In the third quarter, we continued to benefit from our increased scale and from past capital investments and pricing actions that led to strong operating performance with significant margin expansion, resulting in 42% earnings per share growth that exceeded the high end of our guidance. We strengthened our balance sheet by proactively addressing our capital structure in the quarter by increasing and extending the maturity of our senior credit facility and locking in attractively priced long-term capital with our inaugural $500 million senior unsecured notes issuance. We entered the fourth quarter very well positioned with a solid balance sheet, a moderate leverage profile and significant liquidity as we look to continue building on our growth momentum to close out 2014 with a strong fourth quarter.

Net sales for North America came to $728 million compared to $534 million in 2013's third quarter, an increase of +36 percent. Organic Net Sales expanded from $534 million last year, to $588 million, an increase of +10 percent, supported by the company's acquisition of Earthbound Farms earlier this year. Adjusted operating income for the North American segment came to $84 million versus $59 million one year ago, an increase of +43 percent.

Third quarter European net sales were $129 million compared to $104 million in 2013's third quarter, an increase of +24 percent, while European operating income was $14 million versus $8 million in the same period one year ago, an increase of +82 percent.

WhiteWave Foods guidance for the fourth quarter is for earnings per share of $0.26-$0.27, versus an analyst consensus of $0.28. Full year 2014 EPS was revised up to $0.99 - $1.00 versus previous guidance of $0.98 - $1.00; analysts were expecting the company to make $0.99 for the full year.

WhiteWave stock is almost at its yearly high this morning. The stock is reacting favorably to the earnings report and to the company's recent acquisition of Eugene, Oregon based So Delicious, completed on October 31st for $195 million.

Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.